Dc1beModule 4 Job Evaluation

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Amity School of Business


Semester IV

Human Resource Management

(BBAHR-30501)

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MODULE 4

Job Evaluation

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You would be studying.

Job Evaluation: concept, features, process.

Methods- Ranking, Classification, Factor comparison, Point Method

Limitation of Job Evaluation


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JOB EVALUATION

Concept: Job Evaluation is a systematicway of determining the value/ worth of a

job in relation to other jobs in anorganization.

Purpose: To produce a ranking of jobson which a rational and acceptable pay

structure can be built.


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Features:

It helps in establishing a rationalpay structure.

It tries to assess jobs, not people

The basic information on which jobevaluation are made is obtainedfrom job analysis.

It is carried out by groups, notindividuals

Some degree of subjectivity ispresent in job evaluation.

It does not fix pay scales butprovides a basis for evaluating arational wage 5


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JOB EVALUATION

Job evaluation is the process of analyzing and assessingthe various jobs systematicallyto ascertain theirrelative worth in an organization.

Jobs are evaluated on the basis of their contentand areplaced in the order of their importance.

In this way, a job hierarchy is established in theorganization, the purpose being fixation of satisfactory

wage differentials among various jobs. Ajob is rated before the employee is appointed to

occupy it, and the purpose is to establish satisfactorywage differentials.


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JOB

EVALUATION

The process of determining how much a job should be paid,balancing two goals:

Internal Equity:Paying different jobs differently, based on whatthe job entails.

External Competitiveness:Paying satisfactory performers whatthe market is paying.


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Job Evaluation vs. Performance AppraisalPoint Job Evaluation Perf. Appraisal

Define Finds the relative worth of a job Finds the worth of a jobholder

Aim Determine wage rates for differentjobs

Determine incentivesand rewards forsuperior performance

shows How much a job is worth How well an individualis doing on assigned

job


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Amity School of BusinessObjectives ofJob evaluation

Employee Classification(jobs are graded according to scale of

Of a and ob title is assi ned

Job EvaluationProgramme(Implementation through

analytical or non analytical methods)

Wage Survey( assigning money rate of pay

to each job according to its worth )

Job SpecificationJob Description

Job Analysisob EvaluationProcess

Statement ofduties &responsibilitiesof a job

Statement ofhumanqualities to fillthe job


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Process of Job Evaluation

Gaining Acceptance

Creating Job Evaluation Committee

Finding the jobs to be evaluated

Analysing and preparing job description

selecting the metohd of evaluation

Classifying jobs

Installing the programme

Reviewing periodically


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1. Gaining acceptance: Before starting the job evaluation, topmanagement must explain the aims and uses of theprogramme to the employees through oral presentations,letters, booklets

2. Creating committee: A committee consisting of experiencedemployees, union representatives and HR Experts is created.

3. Finding the jobs to be evaluated: Certain key jobs in everydepartment should be evaluated otherwise it would becometoo taxing and costly.

4. Analyzing and preparing job description

Continued..


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Continued..

5. Selecting the method of evaluation by keeping the job factorsand organizational demands in mind.

6. Classifying jobs: Relative worth of each job should be found by

giving weight age to different criteria such as skill requirements,experience needed etc.

7. Installing the programme: Once the evaluation process is overand action plan is ready, it should be communicated to theemployees to put it into operation.

8. Reviewing periodically


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Essentials for the success of Job Evaluation Programme

1. Compensable factors should:

Avoid duplication

Be measurable

Be easily understood by the employees

Not involve huge administrative cost

Be selected keeping legal aspects in mind

2. Operating managers should be trained in fixing and

revising the wages based on job evaluation


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3. Full information should be provided to the employees

about the evaluation programme

4. All groups and grades of employees should be covered bythe job evaluation programme

5. Methodsselected for job evaluation should be easy to

understand.

6. Trade union acceptance and support to the programme

should be obtained.

7. Rate the job and not the person.

Continued...


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8. Strive to collect all the facts accurately.

9. Study jobs independently and then compare them to

reach the final decisions.

10. Avoid biasness.

Continued...


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Amity School of BusinessMethods of Job Evaluation

Analytical Method(Quantatative )

( They make use of

detailed job factors.)

Point Ranking Method

Factor ComparisonMethod

Non Analytical Method

( Non Quantatative )

(They make no use of

detailed job factors. Eachjob is treated as a wholein determining its ranking)

Ranking Method Job Grading Method

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Ranking Method:

It is simplest and most inexpensive method ofevaluation ( worth is found on the basis of title orcontents)

Jobs are arranged from highest to lowest in order of

their value to the organisation or on the relativedifficulty in performing them.

Jobs are ranked in each department and then thedepartment ranking are combined to formorganisational ranking.

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Job Evaluation Methods (non analystical)


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This method is best suitable for small organisations.

Disadvantages:

This is more subjective in nature and thus might offend

the employees. It cannot be used for big organisations.

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Ranking method continued.


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Classification method (job grading method)

Job classes or grades are established after studying job

description and job specifications

This method places jobs into job classes or job grades

like clerical, managerial etc. The classification can also be:

Executives: Further classification under this category

can be Office manager, Deputy office manager,

Departmental supervisor Skilled workers: this may include Cashier, Receipts

clerk etc.

Semiskilled workers: Steno typists, machine operators

Other workers: Dataries, file clerks, office boys


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Advantage:

It is less subjective than ranking method

Very easy to understand Acceptable by all employees

It takes into Account all the factors related to the job.

This system can be used for wide variety of jobs.

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Factor Comparision Method

This is more scientific method of Job Evaluation.

Each job is ranked according to a series of factors.

These factors include skill needed, mental

requirements, responsibilities, Job conditions andphysical effort required , etc.

Each factor is given some weight age and the pay is

assigned by comparing these weights.

In other words wages are assigned to the job incomparison to its ranking on each job factor.


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Steps of Factor Comparison Method:

.

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Selecting factors/key jobs representingwage/salary levels across the organisation

Rank the selected jobs under each factorindependently.

Assign money value to each factor anddetermine the wage rates for all the key jobs.

All the other jobs are compared with the list ofkey jobs and wage rates are determined


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Example

FactorsKeyJobs

DailyWageRate

PhysicalEffort

MentalEffort

Skill Responsibility

Electrician 52 11 14 15 12

Welder 39 14 7 10 8

Cleaner 37 12 9 9 7

Labourer 27 9 6 6 6


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Advantages:

Analytical and objective

Relative and valid as each job is compared with all otherjobs in terms of key factors.

Money value are assigned in a fair way

Flexible as there is no upper limit on the ranking of thefactor

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Disadvantages

Difficult to understand and operate

Time consuming

Costly Marking all the jobs on the same criteria is questionable as

jobs differ in the organisations.

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Point Method In this method points are assigned to each factor related to that

particular job.

All the factors are priortised in order of importance before

giving points to the factor. Steps of Point Method are:


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Select key jobs

Identify factors common to these jobs

The factors are then listed on the basis of thereimportance

Points are given to all the factors

Worth of job in terms of points are determined

Points are then converted into money value


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Factors Degr

ee I

II III IV V VI VII VIII

1. Education 20 40 60 80 100 120 - -

2. Experience 25 50 75 100 125 150 175 -

3. Complexity ofDuties

20 40 60 80 100 - - -

4. Monetaryresponsibilities

05 10 20 40 60 - - -

5. Contacts 05 10 15 20 25 - - -

6 working Conditions 05 10 20 40 60 - - -

7. Physical

requirements

05 10 20 40 60 - - -

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Advantages: It covers all the factors and the sub factors related to a job.

Biasness gets reduced.

Reliable

Jobs might change overtime but the rating scales establishedunder the point method remains unaffected.

Disadvantage:

It is very complex.

Time consuming

Too tedious for the jobs of higher position where the nature of

work is very complex.

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Limitations of Job Evalutaion

The methods used are difficult to understand.

Wide fluctuations in factors can be seen in view of changes in

technology, values etc. Employees, trade union, management and the programme

operators may have difference of opinion in weightage to

different factors leading to dispute.

Dc1beModule 4 Job Evaluation

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